Under a pilot program set to begin this fall, 600 children from zip code 87105, one of the poorest neighborhoods in Albuquerque, N.M., can bank on having anywhere from $6,000 to $10,000 for college.

All they have to do to get the money is a graduate from high school or get a GED. If they don’t go to college, they can still get the money at age 23 and use it for whatever they want.

Nothing — not even trouble with the law — will disqualify them from getting the money.

This sweet deal is part of a test phase of a Children’s Savings Account initiative led by Prosperity Works, a nonprofit that helps New Mexico residents improve their economic situation through asset-building.

Ona Porter, Prosperity Works president and CEO, said she has no worries about whether the children will put the money to good use once they become adults.

“What we think is that kids who have personal and social and financial assets do well and do better in those circumstance that are challenging in life than kids who don’t have that,” Porter said. “So this becomes an inoculation to some of the thins you’re worried about.”

Porter cited research that shows children who have Children’s Savings Accounts are several times likelier to attend college than those who don’t.

“What we know will happen is that school improvements start today, behaviors improve, school attendance improves, academic progress and success improves when kids have accounts,” Porter said. “We don’t have to wait 10, 12, 13 years to see significant improvements.”

However, the authors of the report maintain that more research is needed.

The Children’s Savings Accounts set up through Albuquerque pilot project is part of a collaborative effort between several organizations that play different roles. Besides Prosperity Works, partners include:

• Partnership for Community Action

• New Mexico Legal Aid

• New Mexico Immigrant Law Center

• Native Community Finance

• Interfaith Immigration Coalition

The collaborative program includes 10 weeks of child development and parent engagement training, as well as immigrant services and loans, legal services, and emergency savings accounts.

“In this community engagement model, it’s helping parents understand they also have a role in how well schools are doing,” Porter said.

Parents with children in pre-school through 5th grade can enrol in the program and receive Children’s Savings Accounts, seeded with $250. They will also receive financial education, including financial goal setting.

The CSAs can earn matches of up to $200 per year. Also, the program will offer opportunities to supplement the accounts with $100 incentives for certain behaviors among parents, such as going to school meetings, and later for certain school behaviors among students.

So how can families save up to $10,000 per child for college or life after age 23?

The first year, Porter said, carries the potential for $750: $250 in seed money, $400 based on saving $200 and the one-to-one match, plus $100 in parent incentives.

The second year carries the potential for $600 – that is, $400 from saving $200 and the one-to-one match, plus $200 in incentives.

Prosperity Works estimates that a fully matched and incentivized accounts will reach about $7,500.

Prosperity Works estimates that the first year of the program will cost the agency or the collaborative? $237,000, based on seeding 600 CSAs with $250, with 60 percent of families getting the full match and 60 percent earning the incentives.

A 10-year projection at these rates is $885,000, Porter said.

“This is a pilot and therefore a learning opportunity,” Porter said. “We are projecting take-up rates, but those will be adjusted as well as budget numbers as we have data on the population.”

Porter said while the money is in place to fund the CSA initiative for the first year, sustaining the initiative financially will take substantial effort.

However, she is optimistic. “We have never made a promise that we didn’t keep,” Porter said, noting that the organization has made good on Individual Development Accounts that involve a four-to-one match, a much higher rate than the CSAs.

Porter noted that a number of foundations and corporate partners are interested in helping. “We started a business roundtable that we’re calling Common Good Investors,” Porter said. “They are doing a variety of things to bring in money to fund these actions.

“Some have pledged to give 1 percent of profits to children. Some who are in retail are doing some ‘round-off-your bills’ strategies or ‘add-a-dollar-to-your-bill’ strategies.”

For instance, a car repair shop is asking customers to add $10 to their bill. A beauty shop will ask patrons to add $1, $5 or $10 to their bill. Other businesses have “piggy bank counters.”

“Due to the size of the project, we need a lot of different strategies,” Porter said. “Our goal is establish a $50 million trust fund to continue to drive [the program].”

Eventually, Porter said, she is hopeful that the State of New Mexico will “get into the game.”

A positive sign in that regard occurred earlier this year when the State of New Mexico proclaimed 2013 as the “Year of Children’s Savings Accounts.”

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